Changes to Fixed Costs Rules in Civil Claims

Date Added 22.08.23

In civil litigation, parties often face uncertainty regarding legal costs, which can deter individuals and businesses from pursuing or defending claims. To address this issue, governments in recent years have implemented fixed costs rules, which provide predetermined and transparent guidelines for the assessment of legal fees. These rules set out the maximum amount that can be recovered as costs in various stages of litigation. However, fixed costs rules are not static, and the government has recently reviewed and extended them to apply to more types of claims.

Recent years have witnessed significant changes to fixed costs rules in civil claims, aimed at streamlining the litigation process, promoting access to justice, and balancing the interests of all parties involved. These changes reflect an ongoing effort to strike a balance between certainty in legal costs and ensuring a fair and efficient system, though many argue that it has reduced access to justice for many people and creating an unlevel playing field between Claimants and the cash rich insurance industry.

One notable change to fixed costs rules is the expansion of their applicability. Traditionally, fixed costs rules applied primarily to lower-value claims, where the costs of litigation were proportionate to the amount in dispute. However, in response to concerns over rising legal expenses and disproportionate costs, the government has extended fixed costs rules to higher-value claims up to £100,000. For the first time, it will also include some clinical negligence claims.

Furthermore, changes to fixed costs rules have also focused on promoting early settlement and alternative dispute resolution mechanisms. In many jurisdictions, parties who unreasonably refuse to engage in settlement negotiations or explore alternative resolution methods may face adverse cost consequences. This approach encourages parties to actively seek early resolution, reducing the burden on courts and minimising costs for all involved. By incentivising settlement and alternative dispute resolution, it aims to foster a more collaborative and cost-effective approach to resolving civil claims.

Additionally, changes to fixed costs rules have recognised the role of technology in streamlining litigation processes and reducing costs. We now have electronic filing systems, online case management platforms, and digital communication tools to expedite proceedings and improve efficiency. The integration of technology has not only simplified administrative tasks but also enhanced accessibility, enabling litigants to participate in the process more effectively, regardless of their geographical location.

In summary, changes to fixed costs rules in civil claims reflect an ongoing desire to achieving a fair and efficient litigation process. By expanding their scope, tailoring them to specific types of claims, encouraging settlement, embracing technology, and promoting access to justice, governments strive, not always successfully, to strike a balance between controlling costs and facilitating meaningful dispute resolution without compromising access to justice. Getting that balance wrong will do nothing to instil confidence in the civil justice system, encourage meritorious claims, or ensure that legal costs remain proportionate and transparent for all parties involved.

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